January 13, 2017

Walt Mossberg wrote a piece this week at Recode lamenting the direction that TV streaming services are heading. In particular he reviewed AT&T’s “DirecTV Now” and Dish’s “SlingTV”:

On Sling, for instance, you start at about 30 channels for $20 a month. On DirecTV Now, it’s 60 channels for $35 a month. Both offer other, costlier plans, with more channels, or add-on plans for HBO, or for specialized programming such as sports, or kids’ shows. Both are working on DVR offerings.

In other words, while the bundles may be cheaper and skinnier, they’re still bundles, not unlike the tiers of programming offered by traditional cable and satellite services. And you can’t assemble your own custom bundle. For instance, on DirecTV Now, if you’re on a budget and opt for the $35 a month “Live a Little” bundle, you’ll get Bravo, even if you hate it, but not the Cooking Channel, even if you love it.

The core of his argument, that AT&T and Dish are merely trying to port the cable model to the internet, there merely changing the medium by which live TV is sent to our homes, is spot on. Channel bundles aren’t bad in and of themselves, there are ways to make that work. The problem, as Walt points out, is that these bundles aren’t customizable. If I were able to pay $20 for 30 channels, that may be worth it, if I was able to pick those channels, instead of having them picked for me.

The blame for this falls more on the content providers (Disney, Viacom, Time-Warner) and less on the actual cable companies. The way content deals are structured, in order for a cable company to be able to offer it’s customers CNN, Time-Warner may require they they also bundle in ‘truTV’ and ‘Cartoon Network’. This then gets passed on to the consumer. So it would seem that the cable providers are in the same boat as us.

So maybe the real answer is in tearing away the content from the network / channel model. I’m more than willing to pay those $35 per month, or even more, for a service that works like Apple Music or Spotify, but for television content and movies. Give me access to an entire library of content from all the different networks, including a back catalogue, and the networks get paid per stream. This was the promise of entertainment on the internet. Watching what I want, when I want and where I want.

The networks need to open their eyes and move to the future instead of holding on to the past while they still hold some leverage. If they wait until they’re forced into a position to accept terms just for survival, like the music industry did with digital music, then they could end up trying to figure out how to make money with unfavorable terms and off of fractions of a penny per stream.